Posted: Feb 16, 2019 5:09 pm
LucidFlight wrote:jamest wrote:
With investments, you just never know which way...
Bitcoin is currently trading at about $3600. It can either go to zero or to the moon. Heads I lose several thousand; tails I'm going to the moon.
Heh, funnily enough, the thought crossed my mind that I should comment about there being a 50/50 chance. I didn't, though... but now feel that it is the right time.
On the surface it may appear like a 50/50 chance. However, given the ever-improving blockchain system and the decentralised nature of cryptocurrency, along with the ever-crumbling fiat monetary system, my opinion of the odds is something like 10/90 in favour of the moon.
The article I linked to earlier is a must-read, I think. I'll link to it again below, but read these bits if nothing else:
Since the Great Financial Crisis, the U.S. monetary base has expanded from $875 billion to $3,637 billion between September 2008 and November 2016 Thus, currently the U.S. is a country with high debts, low ability to repay those debts with its central bank abusing the reserve currency status and acting like a printing press to fund US government’ deficits.
The dollar has lost 92 per cent of its value since its issue in 1913 (since US Fed was created) and the U.S. has currently been increasing the supply of dollars at a rate of 13% per annum. This could be a leading indicator of a currency on the brink.
Every fiat currency has ended in devaluation and eventual collapse, right from the Roman Empire in the 1st century AD to modern times. The domino effect of these collapses has led to large wipe outs of masses’ wealth as well as economic hardships for the nations. The above incidents show that it takes years for a bubble to form, as they are built due to the gradual increase in monetary bases over the years. But it takes just about a year (or few) to pop, creating chaos till the time “new order” is adopted.
As these events are “black swan” events, they are often overlooked by investors due to “normalcy bias”. But, whenever these events play out again they give little chance to protect wealth. The resultant resets are painful and generally lead to a wipe out of a large proportion of wealth of general population.
The examples above serve to show that, historically, fiat systems are arbitrary, unstable and will fail. Presently, monetary policy is not a science – it is based on people’s faith in their currency and estimates and predictions. As mentioned earlier, printing more currency does not result in an actual increase in wealth. This ‘currency debasement’ has been one of the main reasons for financial collapses in the past.
https://multi-act.com/evolution-of-mone ... cy-system/